I see two critical phenomena taking place in the market right now... And I hope people will pay attention to them. No. 1, the retail investor has returned to the stock market in a huge way. If you look at mutual-fund inflows, they're very powerful. In October, U.S. equity funds had net inflows of $10.5 billion, the highest monthly inflow since January. These inflows are the biggest influx we've seen into stocks since 2007. Unfortunately, I believe the retail investor is late to the party. Too much money is going into stocks right now at too high of a price. This is not the time to be buying stocks. You want to be buying stocks when other people are selling them, not when everyone in the world is buying them.I sincerely thought the market top was being made in early June and in May when the junk bonds peaked and yields fell to less than 5%. I've been early on that call. Nevertheless, I don't think it's going to end well for the retail investor. (more)
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